The Law on Alternative Dispute Resolution: Private Justice in the Philippines

(Book Summary and Cases)

by: Marian Jane Alumbro

University of Cebu College of Law

Based on the book of Jim Lopez

Caveat: This is merely a summary of the book. You should read the book at least once. This
reviewer does not contain some essential definitions because such are already defined in the
law, RA 9285. No copyright infringement is intended.

CHAPTER 1

The Law’s delay: An introduction

History of ADR

Pre-hispanic era-Jose Rizal noted the custom of the inhabitants of the Philippines before the
Spaniards reached its shores. They submitted the decision of their elders, which they respected
and carried out. According to Jose Rizal, it was better that the “..Judges were persons of the
locality, forming a jury, elected by both parties who knew the case, the customs and usages
better than the gowned judge from the outside to make his fortune, to judge the case he does
not know and who does not know the usage customs and language of the locality”. It is easy to
surmise that our ancestors practiced ADR.

Hispanic Era-Discontented parties had to resort to going to the SC of spain which was a 36-day
trip. Procedure for civil action, akthough similar to the criminal cases, was definitely more costly
and drawn-out. The high cost and unwarranted delays ensured that only the Europeans and the
rich merchants in the city and the wealthy landowners in the rural areas could afford the
prosecution of the civil suit.

Our primitive ancestors were ahead of their times!

Problems of judicial delay according to Marcos (1967):

1) The misuse of the due process and the abuse of legal technicalities;

2) The intervention of the political pressure in the court cases;

3) Sheer weight of the court litigations arising from development and growth;

4) Dilatory tactics of lawyers;

5) Neglect and laxity on the part of the judges.

The “Law’s delay” according to Florentino P. Feliciano:

 1) An efficient and mismanaged court system that fails to act promptly on legal issues ;

2) The disorganized state of the court-connected agencies;

3) The lack of preparation on the part of the litigants and lawyers;

4) The trigger-happy mind frame of lawyers to engage in long-winded examinations of

witnesses; and

5) The lawyers propensity to elevate their cases to the appellate courts and needlessly
filing petitions for mandamus, prohibition and certiorari for the purpose of reviewing
the interlocutory orders of the lower courts.

But a more serious factor behind the “law’s delay” in the Philippines involves the billing practice
of lawyers. (Billable hours, number of court appearances) Delaying tactics to consume time.

The choice between a litigation and settlement is clear. He would rather cut through the chase
and solve his disputes swiftly and move on with his life.

AGAN v. PIATCO (GR> NO. 15501)-SC ordered all affected parties to comment made by one of
the parties that PIATCO commences arbitration proceedings by filing a request for arbitration
with the secretariat of the Internation chamber of commerce, International Court of
arbitration.

Private Justice-the concept is fairly recent development in the administration of justice.

-Private “Courts” are managed by private organizations, called ADR providers to serve
those who need to resolve most types of consumer, civil, corporate and commercial disputes.

-Parties generally agree to enter the private court system for one main reason: the
public court system is too chaotic and unwieldly.

-“vigilante justice”

-Judges, selected by the parties and are paid on an hourly or a per session basis, are for
rent not for sale. They are paid for their time and their expertise, not their expected favors.

CON: Creates a dual court system-one rich and one poor. No means a perfect system, it
offers enormous savings in time, effort, anxiety, money in the long haul.

CHAPTER 2

The litigation of conflict: A Confucian Confusion

Two fundamental reasons for failure of trial courts according to Ralph Warner and Stephen
Elias:

1) Court Rules and Procedures are so complicated and inefficient that lawyer fees and
other costs end up being a bigger problem than the dispute itself.
 2) Winner take-all sustem defies logic, encourages lying and generally brings out the worst
in all participants.

The Nature of Conflict

Conflict- clash of divergence of opinions, values and interests and emotions.

Several phases of the conflict process by Peter Condiffe (1995)

1) Conflict starts when parties perceive their differences-they go though feelings of anziety
and frustration.

2) Realization or expression of grievances and the assessment of all angles in the conflict.

-some parties get afflicted with AVOIDANCE SYNDROME (disregarding the existence of
the problem because of relative powerlessness high risks and costs involved)

3) Parties choose their conflict resolution methods and select their strategies to settle
their disagreements.

4) Evaluation of outcomes and the analysis of all ramifications of full implementation of

the chosen methods of conflict management.

ADR aims to solve the conflict not win the lawsuit which is the aim of litigation.

Conflict is a contest and a problem to solve (Bill Withers)

Modes of Resolving Conflict (Blake and Moulton)

1) Withdrawal-Avoidance behavior on one or both parties

2) Smoothing-emphasis of common interest and yielding by one or both parties.

3) Compromising-each side obtains a part of what it wants.

4) Forcing-forcing the other to acquiesce.

5) Problem solving-involves an agreement in which both sides meet their objective and
affective needs.

When a person wins through a lawsuit can compare it as a Pyrrhic victory (pronounced /ˈpɪrɪk/)
which is a victory with devastating cost to the victor; it carries the implication that another such
will ultimately cause defeat.

Importance of Litigation (Peter Lovenheim)

1) When you need to establish a legal precedent, such as the validity of the patent which
your company holds;
 2) When you need to publicy prove the truth, such as when a customer’s complaint about
the product quality or safety has received wide attention in the media product’s good
name;

3) When your company’s legal rights have been infringed and you stand a good chance of
collecting substantial damages in court;

4) When your opponent is unable and unwilling to participate in ADR; and

5) When serious crimes are involved in the dispute.

Alternative Dispute Resolution

I. Introduction

A. Definitions

Alternative Dispute Resolution – a process or procedure used to resolve a dispute or controversy, other than
adjudication of a presiding judge of a court or an officer of a government agency as defined in this Act, in which a
neutral third party participates to assist in the resolution of issues, which includes arbitration, mediation,
conciliation, early neutral evaluation, mini-trial or any combination thereof (R.A. 9285, Sec 3(a))

Arbitration – means a voluntary dispute resolution process in which one or more arbitrators, appointed in
accordance with the agreement of the parties, or rules promulgated pursuant to this Act, resolve a dispute by
rendering an award (R.A. 9285, Sec 3(d))

Mediation – means a voluntary process in which a mediator, selected by the disputing parties, facilitates
communication and negotiation, and assist the parties in reaching a voluntary agreement regarding a dispute.

B. Overview of the Philippine Judicial System

i. Basics regarding actions, causes of actions and right of action

ii. Overview of Civil Procedure
iii. Overview of Criminal Procedure
iv. Overview of Special Proceedings

C. Distinction between Conventional Litigation v. Arbitration

Conventional Arbitration
Litigation
Nature Not Consensual Consensual –
cannot be
compelled to
submit to
arbitration; but
once you agree,
you’re bound
by it
Who
presides
Participation Parties cannot agree on Parties may
in choosing presiding officer; judge select arbitrator
presiding is raffled
officer
Composition Judge Arbitrator(s)
of tribunal
Who bears Philippine government
the cost for
salary of
presiding
officer
Governing Philippine law governs Parties can
law and select
rules in governing law
settling the that will
dispute determine their
substantive
rights
Venue Venue depends on Rules of Court
agreement applies; Venue
may also
depend on
agreement
Speed of Longer shorter
Procedure
Parties Petitioner v. Claimant v.
Defendant, Petitioner Respondent
v. Respondent
Public Private

D. History of Arbitration in the Philippines

i. R.A. 876 – Arbitration Law (1953)

ii. E.O. 1008 – Construction Industry Arbitration Law

iii. R.A. 9285 ADR Law of 2004
iv. A.M. No. 07-11-08-SC – Special ADR Rules (2009)
v. New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958)
vi. UNCITRAL Arbitration Rules
vii. Katarungang Pambarangay (LGC – RA 7160)
viii. Pertinent Provisions in the Labor Code (1974)
ix. Pertinent Provisions in the Civil Code
x. Pertinent Provisions in the Family Code.

II. Arbitration

1. Ad hoc – A kind of arbitration where the parties are responsible for determining and agreeing on their own
arbitration procedures rather than being supervised by the procedures of an arbitral institution.
2. Institutional – a kind of arbitration which is conducted under the auspices of an institution.

Examples of Institutional Arbitration:

 International Chamber of Commerce

 CIAC
 PDRCI
 Singapore International Arbitration Centre
 Hongkong International Arbitration Centre
 ICSPI Disp.
 American Arbitration Association
  Japan Commercial Arbitration
 Kuala Lumpur RCA
 KCAB
 ICC – International Court of Arbitration
 ICA – not a court of adjudication

3. Domestic Arbitration – not international

4. International – Art. 1.3 Unicitral Model Law

a. the parties to an arbitration agreement have at the time of the conclusion of that agreement, their places of
business in different States; or
b. one of the following places is situated outside the State in which the parties have their places of business:
a. the place of arbitration if determined in, or pursuant to, the arbitration agreement:
b. any place where a substantial part of the obligations of the commercial relationship is to be
performed or the place with which the subject-matter of the dispute is most closely
connected; or
c. The parties have expressly agreed that the subject-matter of the arbitration agreement relates to
more than one country.

1.4. For the purposes of paragraph (3) of this article:

a) if a party has more than one place of business, the place of business is that which has the closest
relationship to the arbitration agreement;
b) if a party does not have a place of business, reference is to be made to his habitual residence.

- Arbitration agreement – determination of rights, obligations, procedures and rules

- Arbitration clause – “any dispute arising out of his contract shall be resolved by arbitration.”
- Container contract – a contract containing the arbitration clause.

ALTERNATIVE DISPUTE RESOLUTION

By. Atty. Gabriel Robeniol
Chapter 1: Introduction
Historical Rule:
Judicial and Legislative trends:
 Utilization of alternatie means and methods implemented in or

outside the court trial system

Civil Code of the Philippines:
 30 August 1950

 Contains provisions of/or on compromise arbitration.

 Encourages litigants to agree upon fair compromise and

authorize arbitration
19 June 1953
 Enactment of arbitration law
 Republic Act. 876

20 May 1965
 Convention on the recognition and enforcement of foreign

arbitration / arbitral awards

Philippine law has acknowledged the international arbitration as

system of setting commercial dispute.

UNCITRAL
 Model law which the Philippines committed its adherence.

Judiciary Action

Response of Judiciary to the Problems of Delay.

 Requirements of conducting pre-trial conference

 Utilization on different modes of discovery
 Proscription against forum shopping

The supreme court encourages the use of arbitration through

Philippine Mediation Commission or through Judicial Dispute
Resolution (JDR)

Legislative Action:
 Special domestic legislation passed the prescription of

arbitration, mediation and conciliation.

 G:

 Labor Code of the Philippines

 National Labor Relations Commissions

Concerning:
 Unfair Labor Practice
 Termination of Employment
 Conditions of Employment

 Damages arising from E – E

 Level Arbitration

Executive Branch Contribution:

 CIAC – Construction Industry Arbitration Commission –

Enacted during 4 Feb 1985 concerning constriction dispute

 23 August 1998 – rules of procedure governing construction

arbitration
 19 November 2005 – CIAC revised rules of procedure

governing construction arbitration

 22 March 2010 – rules on ADR for dispute between national

government agencies: amicable settlement dipute

THE ADR Act of 2004

 Dispute resolution law

 An act to institutionalize use of an alternative dispute resolution

system in the Philippines and to establish the office for

alternative dispute resolution and for other purpose.
 28 April 2004

Philippines as the Venue of ICA

· RTC must refer to arbitration in proper case

· Foreign Arbitral awards must be confirmed by RTC

· The RTC has jurisdiction to review foreign arbitral awards

· Grounds for judicial review different in Domestic and Foreign

 arbitral awards.

· RTC Decisions of assailed foreign arbitral awards

appealable: CA, certiorari

The Lawyer’s Role

 Contribute to the promotion of ADR

 Assist courts in encouraging the parties to avail of alternative

means of dispute resolution

 Explain the benefits of the ADR system.

Chapter 2: Fundamentals of Alternative Dispute Resolution

Alternative Dispute Resolution

 Expeditious and speedy manner

 Methods of resolving dispute outside the court trial system

 Includes similar process in quasi – judicial agencies

 Any process the used to resolve a dispute or controversy

 Neutral third party

State Policy in ADR

 ADR act of 2004 declared the state policy

 Promote party autonomy resolution of dispute

 Freedom of the party to choose or make their own arrangement

to resolve dispute
 Provides solutions that is less time consuming, less

confrontational procedure of goodwill and lasting friendship

 Wave of the future in international relationship

Principles of ADR
 Promotion of party autonomy and self – determination in

dispute resolution
 Recognition of ADR as an efficient tool and an alternative

procedure for the resolution of cases

 Enlisting a private sector participation
Objectives and Benefits of ADR
 Speedy and impartial justice

 Declogging of court dockets.

Features of ADR
 ADR means used to resolve a dispute or controversy

 Exceptions: intention is to cause delay or suspend the

proceeding
 ADR utilize means and methods allowed by law

 ADR is contractual in nature

 ADR avoids court trial

 ADR usually involves the participation of neutral third party

Sources of ADR
 Domestic Laws and Rules

Constitution
Civil Code
Arbitration Law
 Acts of the Executive Branch

 Decisions of the Supreme Court

 International Law : UNCITRAL

 General principle of Law and Equity

Forms of ADR
 Arbitration – arrangement of the and abiding by the judgment

or selected person in dispute; binding between the parties

 Mediation – voluntary agreement between the parties with the

help of third person to convince them to come into an

agreement; non binding between eh parties.
 Conciliation – conciliation of dispute in an unantagonistic

manner
 Neutral – lawyers are brought to present the summary of the

case
 Early – Neutral – availed of in pre – trial case
 Mini – trial – merits of the case ar argued in front of a panel
 Any combination of the foregoing

 Any other ADR forms

Classification of Forms of ADR

 As to the number of parties:

 Bi – party – one or two parties

 Multi – Party – two or more

 AS to the number of issues involve:

 Simple – one issues involve

 Complex – two or more issues

 As to the extent of conclusion

 Complete – all issues involve is resolve

 Partial – only two or three issues involve are resolved but not

all
 As to the role of evidence in the proceedings

 Evidentiary

 Non – merit based

 As to the pendency of the court case

 Case – related – when there is a case involved

 Independent

 AS to the applicable law

 Domestic – when the place of business and arbitration is in the

Philippines
 International – when the place of business involved two states

and arbitration is outside the Philippines

 Foreign – when the place of business is outside the Philippines

and the arbitration is outside the Philippines.

 As to the permanency of the ADR provider

 AD – HOC – temporary

 Institutional – permanent

Components of ADR
 Contending parties
 Dispute or controversy
 Form of ADR

 ADR provider or practitioner

Subject matter of ADR

 Adversarial dispute and controversy

 Exception:

 Civil Status of persons

 Validity of marriage and any other forms of legal separation

 Jurisdiction of courts

 Future legitime

 Criminal Liability

 In general which the law cannot be compromise

Basic Concepts of ADR

 Concluding Acts or Arguments

 Arbitral Award – final decision of arbitration on awarding issue

or controversy
 Mediated Settlement agreement – contract executed by the

parties
 Compromise or compromise agreement – avoidance of

litigation or to put an end to the one already existing

 Waiver or quitclaim – a statement renouncing any right or claim

 ADR providers or practitioners

 Preferences of ADR

Office for ADR

 ADR – agency attached to DOJ

 Executive Director appointed by the president upon

recommendation of secretary of justice